Stiff competition in the current pricey housing market has sidelined a number of new buyers, especially in large urban areas.
These buyers usually make up about 40% of the market, but are now less than a third, according to the National Association of Realtors. The majority are millennials between the ages of 25-34.
However, there is still hope for home ownership. While the pandemic has fueled strong demand for housing, it has also provided more flexibility in where people can live, benefiting those same startups.
So where are the best bets for them in 2021? Not surprisingly the Midwest.
Four of the top 10 markets for new buyers, as determined by realtor.com, are in the Midwest. Bloomington, Illinois, tops the list. Iowa City, Iowa, came second, followed by Kalamazoo, Michigan; Great Falls, Montana; Eau Claire, Wisconsin; Savannah, Georgia; Schenectady, New York; Taylorville, Utah; Harrisonburg, Virginia; and Rapid City, South Dakota. Some sources consider South Dakota a Midwestern state.
All of the top markets have median home prices below the current national median of $ 370,000. Kalamazoo has the lowest median home price at $ 155,000, while Taylorsville has the highest at $ 350,000.
But it’s not all about price and affordability. To determine the best cities, realtor.com looked at house prices in relation to local income, share of 25-34 year olds living in the market, availability of homes for sale, employment opportunities, distance from work, and Services. such as bars and restaurants. It also limited the rankings to one city per state.
“With 50% fewer homes on the market this year than last year, the US housing market is competitive for all buyers,” said Danielle Hale, chief economist at realtor.com. “New buyers have a greater disadvantage because they don’t have the money from a previous home sale to help with their down payment or compete in bidding wars.”
Another survey of potential startups by realtor.com found that 44% of millennials said they didn’t have enough for a down payment. Part of that, however, may be that they are unaware of programs designed to help them.
“There are some great loan programs available only to first-time homebuyers that allow for as little as 5% off without mortgage insurance,” said Jennifer Myers, a real estate agent at Dwell who often works with millennials and is one of her own. “There are similar programs across the country and many startups are eligible, but just don’t know what these great ways are to make their first home more affordable.”
However, when buying is out of the question, the best cities to find affordable, luxury rental apartments are usually in the south, according to another study from RENTCafe, an apartment listing site. Georgia, especially the Atlanta area, took the peaks. Cities in Alabama and South Carolina followed suit.